They're toast: An obituary for Oakbay
One clue was in the snacks.
In its first year as a listed company, Oakbay Resources and Energy’s annual general meeting featured bowls of potato crisps, some nuts, mixed biscuits – and cheese toasties on white bread. Not the delicate, triangle-cut sandwiches served on silver platters at fancy parties. These were thick, honest slices of bread, with slices of cheese nearly as thick slapped between them, the whole thing toasted just right.
Though served on a glass boardroom table shaped like a ship, in a cookie-cutter office block on the unfashionable side of Sandton, this was the kind of snack you’d expect from a mining company. The handful of executives and shareholder representatives there to check the regulatory boxes polished off the lot with a gusto that did not fit with their well-tailored suits.
At its second, and what would turn out to be its last, annual general meeting as a listed company, Oakbay did not serve cheese toasties, or anything resembling real food. On the same, still inexplicably ship-shaped table there were only three bowls of potato crisps and one of what looked suspiciously like cheap knock-off Romany Creams. The decidedly more nervous and gaunt group of executives and shareholder representatives touched none of it, subsisting instead on dangerous quantities of sugar-sweetened coffee.
Between October 2015, the date of the first meeting, and October 2016, the date of the second, many things had changed for the Gupta family that owned nearly all of Oakbay.
Although not exactly beloved or paragons of virtue, the Guptas were still considered legitimate businesspeople in 2015, especially by the decidedly low standards of South African mining. Had they somehow been involved in one large corrupt payment to secure business from Transnet? Perhaps, but the evidence was not conclusive, and Oakbay had no trouble buying the services of banks, auditors and advisers.
In 2016 things went downhill fast. In February of that year investigative journalism nonprofit amaBhungane revealed how the Gupta family had seemingly muscled in on state arms exports, just as their acquisition of Optimum Coal Mine looked increasingly suspicious.
By March high-ranking ANC members were openly expressing their concern about the family’s reach into government. In April banks confirmed that they were closing Gupta accounts. By June it was fairly clear the family had made a bid to buy influence at the Passenger Rail Agency; by August the treasury was looking closely into Gupta business with Eskom; in September the name of Trillian Asset Management and stories of its dealings with Transnet and a Gupta lieutenant had made it into news pages.
By the time October rolled around again the Gupta family had moved from acquiring mines and doing deals to publicly announcing they would sell off all their assets in South Africa. The promise was not kept, but the people in their employ had lost the swagger of success.
“Just go away” was the response from the previously feisty Gupta family representative Nazeem Howa to questions. Two weeks later he resigned from his various positions in Gupta companies. He was never replaced.
In hindsight the same progression was visible in formal, non-bread metrics, such as Oakbay’s share price. In early 2016 someone, somewhere, was still interested in the listed Oakbay. In a series of unusual trades – though ultimately not found suspicious by the JSE – the company’s share price oscillated wildly from more than R30 to below R8, and back to R24, for no immediately apparent reason.
Then the share price went stagnant, and the company’s management also seemed to lose interest. In August 2016 the company delivered an annual report just hours before a regulatory deadline. A cursory glance showed that large sections of the report, sections dealing with strategic analyses and resulting plans in the coal and uranium markets, were identical to those from competing companies. When questioned about this Oakbay responded with what amounted to a shrug, and updated the report to credit those competing companies with their respective sections, in effect admitting it was cribbing their strategy wholesale.
Oakbay’s October 2016 meeting showed a similar lassitude. The participants literally read from a prepared script and wrapped the entire meeting up in just 12 minutes.
A month later then public protector Thuli Madonsela published her report finding that the mountain of evidence around the Gupta family demanded a full judicial inquiry.
If that had been the worst of it, perhaps Oakbay could have continued its shambling zombie existence, with functionaries doing the bare minimum to keep it listed and ready against the day the Gupta family rediscovered its drive and ambition.
Then came the #GuptaLeaks emails and the tales of bribery and corruption, treason and money laundering. Oakbay went without a fight. On July 10 it asked the JSE to pull the plug on its listing, a process that concludes on Monday.
May it rest in peace.
Disclosure: the writer owns 10 shares in Oakbay Resources and Energy, with a last-traded market value of R58 at the time of publication.